LNZA stock is undervalued, Roth says

With a $200-million U.S. Department of Energy award on the table, Roth MKM analyst Leo Mariani likes what he sees from LanzaTech Global (LanzaTech Global Stock Quote, Chart, News, Analysts, Financials NASDAQ:LNZA).

On March 25, LNZA announced that it had been selected by the Department of Energy to o begin award negotiations for up to $200 million in Bipartisan Infrastructure Law and Inflation Reduction Act funding as part of the Industrial Demonstrations Program.

“The DOE’s Industrial Demonstrations Program is climate leadership in action. We look forward to developing a replicable, breakthrough solution with Technip Energies that creates high-quality jobs and supports local communities for a just energy transition,” said CEO Dr. Jennifer Holmgren.

The analyst summarized the development.

“LNZA announced that it and Technip Energies were selected by the U.S. Department of Energy Office of Clean Energy Demonstrations to begin award negotiations for up to $200 million to fund the design, engineering, construction, and equipment for a commercial-scale plant in the U.S. that produces sustainable ethylene from CO2. LNZA believes that this integrated solution has significant replication potential for ethylene crackers worldwide,” he wrote.

In a research update to clients March 25, Mariani maintained his “Buy” rating and price target of $6.00 on LNZA.

The analyst thinks LNZA will post an EBITDA loss of $65.3-million on revenue of $95.2-millio in fiscal 2024. He expects those numbers will improve to EBITDA of negative $33.3-million on a topline of $175.7-million the following year.